Ireland: Manufacturing PMI drops in January from December’s all-time high
The Investec manufacturing Purchasing Managers’ Index (PMI) declined from December’s record-high of 59.1 points to 57.6 points in January. Despite the drop, the indicator remains above the 50-point threshold that separates expansion from contraction in the manufacturing sector, where it has been for over four and a half years.
January’s print reflected sharp expansions in new orders, output and employment. New orders expanded at a fast pace, driven by higher demand from new and existing clients. January’s expansion in new orders, however, marked a slight deceleration from December’s near-record growth rate. A higher volume of new orders resulted in an increase in manufacturing output. Staffing levels increased at a marginally slower rate in January compared to December’s all-time high, and backlogs of work climbed for the ninth consecutive month. Regarding price developments, input costs rose at the fastest rate in eleven months as prices for raw materials such as chemicals, steel and oil increased. This pushed output prices higher.
Assessing the latest one-year outlook reading, Investec Chief Economist for Ireland Philip O’Sullivan commented:
“We also note that the Future Output index of expectations increased at its fastest pace in 14 months, which suggests that December’s record Manufacturing PMI reading may be eclipsed in the coming quarters.”